Tether shareholder files defamation lawsuit against WSJ

The Wall Street Journal (WSJ) is reportedly facing a defamation lawsuit over allegations made in a 2023 article describing illegal activities allegedly made by Tether and Bitfinex.

The lawsuit was filed against Dow Jones & Company Inc. (the parent company of WSJ) on February 28 at the Superior Court of the State of Delaware in New Castle County by Christopher Harborne. This lawsuit was filed through AML Global Ltd., which operates in the British Virgin Islands, Hong Kong, and Wyoming.

Harborne is a Tether shareholder with a 13% stake in the crypto firm. According to Harborne, he has no executive positions at Tether or Bitfinex. He claims his stake was obtained only through Bitfinex’s 2016 hack reimbursement plan.

The article published in February 2023 claimed that Bitfinex “backers” used “shadowy intermediaries, falsified documents and shell companies” to maintain banking access in late 2018 amid internal struggles.

The lawsuit alleges the Journal and its reporters falsely accused Harborne and AML Global of fraud, money laundering, and financing terrorists despite the reporters having documentation that conclusively disproves or counters their claims.

Despite these legal tangles, the Tether-issued USDT stablecoin has seen its market gain over $20 billion in value, with Tether reporting a net profit of over $2.8 billion in Q4 2023. This sustained profit is largely attributed to passive income from the US Treasury securities backing Tether’s reserves.

“This defamation action arises from Defendant Dow Jones & Company, Inc.’s d/b/a The Wall Street Journal (the “Journal”) publication of an article in which it falsely accused Plaintiffs Christopher Harborne (“Mr. Harborne”), and AMLF of committing fraud, laundering money, and financing terrorists — even though the Journal and its reporters knew and possessed documentation that conclusively showed that those accusations are false,” the filing states.

The article from WSJ extensively discussed Harborne and AML Global’s application for a Signature Bank account. According to a note published after the article was edited on February 21 this year, the specific section was removed to avoid “any potential implication” that connects AML’s attempts at creating a Signature Bank account was “part of an effort” by Tether, Bitfinex, or related firms to “mislead banks.”

The Wall Street Journal also noted that the deleted section did not mean to imply that Harborne or AML withheld or falsified information during their application process. The article was a critical factor in determining the effects and states of regulatory oversight on the crypto industry. At the time, key competitors to Tether faced concerns about contagion effects from traditional finance.

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